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GRAND HAVEN — The developer of a proposed hotel and conference center at Grand Landing said he may have the required research data before November that would justify public issuance of tax-exempt bonds to finance the project.

Meanwhile, a Grand Landing executive said he has already heard from organizations that are interested in booking conventions and meetings there.

"We've had a lot of interest from groups calling us, saying, 'Hey, we want to do our 300-person meeting. When are you going to be done with your hotel?'" said Don Knape, Grand Landing vice president.

"We know there's demand out there for it," he added.

The Grand Haven city council recently approved the formation of a nonprofit board that would authorize tax-exempt 63-20 bonds, with the funds to be used by a private development company, Legacy Hospitality LLC of Avila Beach, Calif., to build a six-story, 125-room Hilton Garden Inn with an adjacent 20,000-square-foot convention center.

Morgan Burkett, president and CEO of Legacy Hospitality and sister company Hawthorn Suites Golf Resorts, said his "best guess" at this point is that the cost of the land and construction of the hotel and convention center would be between $16 million and $18 million. Legacy Hospitality would be buying the hotel/convention center site in the 20-acre Grand Landing property.

Before any bonds are authorized, however, a study of the West Michigan market and feasibility of the hotel/convention center proposal has to be done by an independent research firm, which will be hired soon, Burkett said in late August. He said the research will take up to 60 days and he expects the report "probably by the end of October."

"The most important thing is to assess how the market is performing," said Burkett. "Then they have to extrapolate some data because we're adding a component to this hotel that would not be typical.

"What we're adding to that is a 20,000-square-foot conference center adjacent to the hotel. So that’s a pretty dramatic, new component for hotels in West Michigan cities," he said.

Burkett said he and his Legacy Hospitality partner, Cortland R. Dusseau, who is a native of Michigan, have been doing business in West Michigan for a couple of years. They were involved as consultants in the turnaround of the stalled Macatawa Legends Golf & Country Club project in Holland last winter, and are now building a Hyatt Place hotel on Byron Center Avenue and M6 in Wyoming.

He said they became interested in building a hotel at Grand Landing about a year ago. He said it was a "very challenging situation" because of the mixed-use nature of the Grand Landings development.

The pair felt that a conference component was necessary to increase occupancy of a hotel in that location during the winter months, he said. Burkett added his company has been involved in evaluating a hotel at Grand Landing "for the better part of six or eight months."

According to Burkett, the tax-exempt bonds would provide Legacy Hospitality with a lower interest rate on its acquisition/construction debt than conventional financing, which typically would involve a portion of private equity loaned at a much higher interest rate.

A Hilton Garden Inn "is what we call ‘full-service upscale,’" said Burkett, who has worked in hotel management and development for 37 years. The Hilton Garden Inn brand always includes a restaurant, which in this case would be in the lobby atrium and would be "like a cross between Panera Bread and Starbucks, with alcohol added."

Room rates would probably range from $119 to $159, he said.

Grand Haven Mayor Roger Bergman said the city council has not given final approval to proceed with the bond financing plan because "we have to have the feasibility study first."

An issued raised by some city commissioners was whether or not the city would be left in the risky position of owning the hotel and conference center at some point in the future.

Bergman said if the project gets the green light and the 63-20 tax-exempt bonds are issued for it, the developer would own the property at the outset and repay the bonds.

Details of a contract with the developer would have to be worked out in advance with the nonprofit board the city council would appoint to issue the tax exempt bonds.

Knape said Grand Landing developer Craig S. Adams and city officials have always envisioned a hotel and conference center there to "bring groups out not just in summer but year-round."

The 20-acre development is situated on former industrial land next to the south channel of the Grand River just west of U.S. 31. It is billed as a self-contained resort community within walking distance of downtown Grand Haven, with a hotel and convention center and eventually up to 130 condos, plus restaurants, an outdoor amphitheater and a wide variety of retail shops and service businesses.

The Phase 1 or “Village” section of Grand Landing was completed last winter and includes 40 condos, 12 of which are sold, according to Knape.

A Culver's restaurant and a sub shop opened a year ago, along with other retail establishments. Another one of the retail spaces is expected to be occupied soon by a salon.

Knape said the weak economy has had an impact on Grand Landing.

"We're just managing our way through it but we're encouraged by what we see so far," he said.

Pete Daly is a Grand Rapids Business Journal staff reporter who covers small business, banking and finance, food service and agriculture and government. Email Pete at pdaly at grbj dot com. Follow him on Twitter @PeteDalyGR

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